What to Avoid During a Home Purchase
With the thrill that comes with an accepted offer and a "yes" from the lender, many homebuyers make the mistake of taking their enthusiasm straight to the mall or furniture store. Until the keys are handed over, there are still some hoops to jump through. We have listed some actions below you will want to avoid when waiting for your loan to close.
Don't buy big-ticket items. Although you will be planning ways to turn your new house into a showplace, avoid big ticket purchases like appliances, electronics, or expensive furnishings. You will also want to avoid vacations and vehicle purchases until your loan closes. Your credit numbers could be altered suddenly if you make a huge purchase using plastic. It's also a bad idea to make those big purchases using cash. Lenders are looking at your available cash when considering your loan.
Don't look for a new job. Consistency in your job history is a positive thing to lending institutions. Getting a new career before you apply for a mortgage loan may not compromise your approval at all. However, if you switch careers before you qualify, your loan process could fail or be slowed down.
Don't switch banks or move finances around in your accounts. Bank statements from the last two or three months for all of your accounts (savings, checking, money market, and other accounts) will be analyzed as the lender considers your application. To eliminate fraud, lenders want to see a consistent portrayal of how you earn your living and where additional money comes from. Changing banks or transferring funds elsewhere - no matter the purpose - may make it harder for the lender to review your funds.
Don't give funds directly to your seller (commonly in cases of "for sale by owner") for earnest money. Until the sale is complete, any good faith deposit remains yours. The earnest money is to go toward your expenses upon closing; some individual sellers may not realize this. Get an attorney or other neutral person who can hang on to the money or place it in a trust account until you close. The disposition of good faith funds, if your sale falls through, should be indicated in the contract with your seller.
At Integrated Financial Solutions, LLC, we answer questions about this process every day. Call us: 4104614043.